Medical bills can be a heavy burden for individuals and their families. If you or a loved one faces overwhelming medical debt, you may consider filing for bankruptcy. In reality, overdue medical bills are a common reason for personal bankruptcies. Today, the bankruptcy attorneys at Groce & DeArmon discuss bankruptcy and medical debt. Read on to learn how you can wipe out medical debt in chapter 7 and chapter 13 bankruptcy.
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What to Know Before You File
There are some things you should be aware of before you file for bankruptcy. First, you can eliminate medical debt in both chapter 7 or chapter 13 bankruptcy. In a chapter 7 bankruptcy case, medical debt is treated as a nonpriority unsecured debt — it’s not secured by a piece of property. This means that your medical debts won’t receive priority, assuming the trustee can make payments to your creditors. If you’re battling substantial amounts of medical debt, a chapter 7 bankruptcy might be your best option to find relief.
You Can Get Rid of Other Debts, Too
If you file a case to discharge the medical debt, you’ll also get rid of other general unsecured debts. Medical debt is considered the same as credit card debt, personal loans, old utility bills, and money borrowed from friends or family.
You Must Still Qualify
There’s no limit to how much medical debt you can wipe out in a chapter 7 case. That’s right, any medical bills that you put on your credit card will be discharged. However, you must still qualify, meaning that your income has to be low enough for you to pass the means test. So, the type of bankruptcy you file will depend on whether you meet the qualification requirements and what makes sense for your situation.
What to Do When You File
When you file a case, you must list all your debts, personal property, and real estate. Even if your spouse doesn’t file for bankruptcy with you, you’re required to reveal all your family income and expenses. You’ll also disclose other financial details, including your marital status, recent property transfers, and recent debt payments.
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Groce & DeArmon Can Help
If you’re faced with medical debt, you’re not alone. Contact our bankruptcy attorneys to learn more about your options. You can also learn more about filing for bankruptcy on our website, or call (417) 862-3706 to see how we can help.